Uganda: UCL to Issue 4 Million More Shares

Source from:  New Vision (Kampala) 11 January 2008 01/14/2008

The current shareholders will be given priority and will get four for every five shares held. The rights issue, which will be on February 4, was approved by the shareholders this month. The issue, which will be the first of its kind in the 10-year history of the Uganda Securities Exchange, will sell each share at sh2,650. UCL is trying to raise sh10.6b of the sh19b needed for construction of a factory in eastern Uganda that will target the market in Kenya and southern Sudan. The issue of the four million shares will amount to nine million shares so far issued. The issue, however, is awaiting approval of the regulators, the Capital Markets Authority. Increased construction in the region has pushed up the demand for construction materials. David Ofungi, the managing principal of Dero Capital, an investment firm, said the rights issue would raise additional equity funding without diluting the shareholding. Brokers said the stocks had started the year well with several counters registering upward movements in the share price. "Uganda Clays opened the year with a 15% jump to sh6,180 following news of the expected rights issue. The equity market opened the year on a high note, with rises on New Vision (2.6%) and British American Tobacco (3.8%)," Grace Semakula, an investment analyst at African Alliance Uganda, said. British American Tobacco has returned to profitability. Its share price is rising towards the listing price of sh1,000 below which it has been trading for last three years. New Vision will also conduct a rights issue after approval of the shareholders last December. Enditem